Member Info for skittish

The Deed created between ATOG Midco Limited (ATOG ML)and Medco Energi dated 19th November 2019 is really quite interesting - but it probably poses more questions than answers.

We know from the excruciating RNS's of early July 2019 that AAOG was interested in buying Tunisian assets and blew around £600K on DD before deciding not to go ahead. We can work out what those assets were from the AAOG 12th July 2019 RNS - now confirmed by this document - but full details on my ibb website.

They were bought for $114M in 2014, but given the fall in oil prices and declining production may fetch circa $35-$40M now.

We know that DS tried, in association with EHGOSF and JB to buy them "privately" via Anglo Tunisian Oil and Gas Limited (ATOG) but for some reason cannot complete the deal, as they have been trying to do so since mid April. We know that ATOG is one reason DS had to fall on his sword.

In the document now released that ATOG ML is providing a guarantee to the seller Medco Energi that it will pay all the costs incurred by Medco Energi in progressing with the deal to ATOG.

It is effectively an indemnity.

And presumably Medco require it as the deal is stalled - as Medco are worried if it falls through they will be out of pocket, so require a guarantee that their costs will be paid even if the deal falls through.

But hang on a minute - ATOG is the company with the money - as we know that in return for the EHGOSF guys getting on the board they invested some cash so they could pay the initial deposit on the Tunisian deal, and the share capital was expanded to £1000 shares.

ATOG ML on the other hand has just £1 in a single share owned by DS and just DS and JB as directors.

So - the supposedly "poor" company ATOG ML is guaranteeing the debts of the wealthier company ATOG, which is the company which has access to EHGOSF capital.

Doesn't make sense - unless there is something we don't know.

Thre Deed also refers to ATOG Holdco - which is a company that doesn't exist - at least not at present and not in England and Wales.

What is clear is that EHGOSF hasn't the cash to put into ATOG to progress the deal hence the need for an indemnity from the supposedly poorer ATOG ML.

And where would ATOG ML get some cash from? Mmm.....

The Deed also refers to "The Third Amendment Agreement" - obviously the initial deal dated 23rd April 2019 has already been amended twice and has now been amended a third time on or about 19th November 2019. Amended presumably to take account of the terms of The Deed.

So EHGOSF haven't got cash, nor has DS - otherwise no need for ATOG ML - and ATOG clearly can't raise cash on its own as there would be no need for The Deed otherwise.

None of the companies with which DS is presently associated has any ready cash.

There is a company with which JB is associated, however that is sitting on several million $ in cash.

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And it may now have contracted a very cheap rig from a subsidiary of a company which owes it around $5M - thus freeing up a bit of liquidity for something else.

JB signed The Deed, not DS.

It would be really interesting to see what was contained in "The Third Amendment Agreement" - although I suspect we are unlikely to ever find out.

Counting against any assignment of the deal between ATOG and Medco to AAOG is this from 12th July 2019 AAOG RNS -

" The Company will continue to review whether any transaction between ATOG and AAOG should be treated as a related party transaction pursuant to the AIM Rules for Companies."

Presumably if it were assigned it would count as a RTO - and suspension.

So if it is ever to be assigned - it isn't there yet.

On the other hand why involve ATOG ML at all?

ATOG clearly cannot raise any funds itself - not even to pay Medco's costs of the sale, let alone pay for the asset itself. And if ATOG can't raise funds when it has financiers on its BoD then how can ATOG ML?

And if ATOG ML has sufficient resources to guarantee paying Medco's costs - and it must have otherwise Medco would never have signed The Deed - how could it pay for the asset itself, when ATOG don't look like they could (and they don't look like they have brass buttons, even).

Major shareholders in AAOG were not supportive of funding the Tunisian assets presumably the same would be true now. So any AAOG fundraising is ruled out.

Unless there is another source of cash somewhere?

I guess watch this space.

As I said more questions that answers, but intriguing nonetheless.

I'm just so pleased irishmouse is on the case - hint - you might find something behind the spaghetti hoops.......

Yes, but what news?

Look up atog midco. Something happened on 19th November. I'm not quite sure what it means as this deal appears to benefit Anglo Tunisian not AAOG, but it was on 20th that we appeared to have renewed interest in AAOG shares.

Also the deed has been signed by JB and not DS.

More is going on here than just drilling and also interesting that the neighbouring Marine III licence was renewed on almost the same date.

Quite how this all plays out I'm not so sure, but doodlebugs cryptic "crossing the rubicon" comment maybe wasn't related to booking a rig?

May also explain the total news blackout, excepting straight down the line rns's.

More manoeuvring going on here than in Sainsbury's car park.

Just to follow up earlier - this is what the half year report stated -

"Negotiations are ongoing with two potential rig providers, both of which have rig units in the Republic of the Congo. The Company is also scouting for other units with minimal mobilisation charges as a fallback option."

I'm thinking SFP #1 is the fallback option with the minimal mobilisation charges - why would they be minimal (normally I would think $1M+) - because SFP will not charge for mobilisation as part of the payment for the money we are owed by SNPC.

The only catch is we have to wait between 3 - 6 months.

The SFP rig is important for another reason - it will be crewed largely by Congolese - SNPC is the means by which the Congolese obtain experience and expertise for their domestic workforce.

So if TLP-103C-ST actually does come up with the first land based Djeno producer it will be a big feather in their cap - and for the domestic workforce and for SFP and SNPC.

Politically that would be very important.

And on the Mengo/Djeno decision it wasn't all our decision to take - we only own 56%, the rest is SNPC, and they don't have a share price to worry about.

And as for the drilling pad that has appeared recently at Pointe Indienne, 7km from us, this will be the first drill on that field for at least 10 years, maybe even 20 years. PI is operated by African Oil and Gas Corporation which is owned by ex SNPC head Denis Gokana, also a friend of President Sassou-Nguessu.

Maybe there is a bit of race on to get down to the land based Djeno, as whoever gets there first would go down in Congolese oil drilling history as having the first big land based producer. No one ever remembers who was second.

And we still don't know where New Age will be drilling, but there is a good chance it will be within a few km of Tilapia and they too will be going for the Djeno.

And we're valued at £9.5M.

I think the Mengo/Djeno argument was done to death a while ago. I was surprised also when they went for the Djeno over the Mengo - whilst the Djeno is (probably) the better long term project cash flow is king and we are suffering greatly for that now.

Maybe the Mengo wasn't actually that easy to develop or the difficulties with the leaking plug made it more difficult (or more risky) with a less powerful work over rig.

As to the share price it is clearly crippled. I got the impression there was a big seller on Friday (apart for the funds) selling 1M+, clearly not enamoured by the prospects of a wait of 3 to 6 months - and probably betting that on past performance the wait would be 6 months.

But the 12/11/19 RNS actually states -

"The SFP #1 Rig (the "Rig") is the subject of contractual commitments to a super-major which will expire on 30 December 2019. SFP may extend such contractual commitments until (but not beyond) 30 March 2020 and will notify AAOG on or before 30 November 2019 as to whether its contractual commitments have been extended."

So the super major commitment is only to to 30/12/19 - and it is SPF that can extend to 30/3/20 - not the super major. I would have thought it was the other way round - but that isn't what the RNS says.

Where is the rig now? Well the only SM's in Congo are Total and Eni. Total is offshore, and the only major Eni field is M'Boundi around 20km east of Tilapia. So my bet is it is there - but spotting it may be difficult - and Plantlabs is more restrictive these days.

And why use this SPF #1 rig? Why not go for a rig that is available earlier? Well SNPC, whose subsidiary SPF is, still owe us £4.7M or around $5.6M. It would seem unreasonable that we would have to pay full whack for the rig ultimately owned by SNPC when they owe us $ millions. So maybe there is is quid pro quo going on here. This is the SPF home page -

http://www.snpc-group.com/fr/filiales#Sfp

7000 metres! Surely not downwards - the Djeno is only 2500 metres, and Vandji just below 3000 metres. But if you wanted to do a bit of directional drilling under the sea for TLP-104 etc (or indeed elsewhere) then 7000 metres may come in useful.

And if you go up a page on the above link you come to SONAREP, another SNPC subsidiary. Several mentions on there of Tilapia, which is where SONAREP first started. Which brings us back to the Gerard Bougoin/SNPC/President Sassou-Nguesso relationship which goes back years. Tilapia is important to SNPC as it has a real stake and say there (44%), as opposed the the other fields where it just has a carried 15% - aside from the struggling MKB field, where it is operator. So Tilapia was and remains a bit of a flagship for them.

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And slide 26 of this presentation shows "our" rig SNP #1

https://yearofenergy2019.com/wp-content/uploads/2019/04/Focus-SNPC_English-version_Final.pdf

Slide 13 shows the eastern limit of Tilapia indicating TLP-103ST will be as close to our boundary as you can get, and as close to the fault line as we can get.

https://ibb.co/GpwXG4b

So SNPC and SPF and SONAREP all have a stake in Tilapia being a success. And no coincidence that we are using their rig - their only rig.

"The Rig is the most suitable rig available in country" - yes - but suitable for what reasons?

Will we be drilling in Q1 or Q2? I don't know. But it is very much in the interests of SNPC to make a success of this and they are now very much locked into the success of TLP-103ST.

Are they paying for the rig, or defraying fees? Again I don't know - but interesting that we should have waited so long for their rig. And the MR 8000 is the largest rig that can be transported on land.

The present day sellers obviously aren't prepared to wait 3-6 months, and the share price is excruciating, but if you are prepared to take a slightly longer view then this can still meet the expectations of earlier this year.

I'm positioning accordingly - 3 months/6 months it doesn't really matter in the great scheme of things.

And other things can happen in the interim.

nimbidc - thanks for that.

In that case overall it should be value enhancing to existing Baron shareholders.

I guess all the detail will be in the admission document.

I'm fairly new to this one, but took a small holding a few days ago.

It appears to me that we (Baron) have already got 1/3 of TL-SO-19-16 through the contractual obligation. So that won't change as a result of this deal.

So we will be effectively swapping 2/3 of everything else we have for 1/3 of Telen PSC which is due to drill in 2020.

http://www.sundagas.com/assets.html

Sunda will also get a market listing, and their present two owners will effectively each get 33% of the new company.

Is that a good deal? Possible synergies following the merger?

What are our other assets worth, and are 2/3 of them worth more than 1/3 of Telen?

Interesting RNS today.

As tends to be the pattern these days, slightly ambiguous wording.

"pleased to announce that it has entered into a rig option agreement (the "Rig Agreement") "

and

"The Rig Agreement gives AAOG the right to contract the rig for TLP-103C-ST and a further four wells at our call."

So they are committed, but for us it is an option, a right to contract, "at our call" - and I'd suggest that applies to the entire contract and not just the further four wells.

So we are not, as yet, committed.

I'd suggest that this is may be the fall back option, referred to in the half year report of 27th September 2019, the "scouting for other units" option.

Shareholders needed something - and this is it - with a final date for drilling Q2 2020.

But if something better comes along in the meantime - then it can be junked.

I suspect this, and the $25M financing deal (no definite commitment there either) are all part of position taking - saying we can do this on our own, if need be. Quite who we are advertising this to I'm not sure.

So this, I'd say is the contingency option, hence a possible delay of up to six months.

Question is - what better option is going to turn up in the meantime?

FWIW (and it ain't much) the registered offices of Cellplan Ltd, WideAcademy Limited and Widecells International Limited all changed yesterday to Waverley House, Noel Street, London, England, W1F 8GQ.

WideAcademy Limited has been further changed today to Waverley House Waverley House, 9 Noel Street, London, England, W1F 8GQ.

Not quite sure what goes on at those offices. Appears to be lots of tenants at Waverley House.

I too am largely out, as I now believe that any news to be issued will simply be timed to suit the agenda of the directors (whatever that may be) rather than shareholders.

Retain small shareholding as a punt.

I'm Barclays - trying for "at best" - they're normally pretty good - I'll leave it pending til close and see what happens.

Well, although the share price has apparently fallen today I'm trying to buy a few - and only a few - but don't seem to be able to get them.

That is despite all the "sells".

Anyone else having similar trouble?

Looks like the New Age/CNOOC deal has now completed, albeit not announced officially.

This is the New Age directors page.

http://www.newafricanglobalenergy.com/directors/

Both Hopu and Kerogen are Chinese funds.

Chengyu Fu is now Chairman, he is an ex Chairman of both CNOOC and SINOPEC. Named the 7th most powerful businessman in China in 2012 -ahead of Jack Ma.

Yu Liang is also ex CNOOC.

Chengyu Fu is without doubt one of the biggest hitters in China, suggest that big things will be happening at New Age in the future.

It's like "Tinker, Tailor, Soldier, Spy" - we are supposed to believe that doodlebug6125 is DS - but is he?

Or is he someone close?

Or nothing to do with DS?

Who just happened to strike lucky noticing ATOG Midco Limited had been created and posted that here on that day - so as to give later credibility when it came to wind up time?

Question is - are we getting the crown jewels or chickenfeed?

And if it is the crown jewels - then what is it - a bit of plate or the 24 carat stuff?

I don't know - I'm looking - but I doubt if anything meaningful is yet in the public domain, although there was an interesting session of buys in the hour and a half prior to "the post".

AAOG has been on radio silence ever since DS left, but it was a bit of a leaky ship when he was in charge.

It looks like a few have chucked some baubles at it on the basis that the information is the crown jewels.

And interestingly, some were chucking baubles about prior to there being a post.

Is it Tunisia? New Age? CNOOC? Wing Wah? All of them?

I'm sure we will find out in due course. If doodlebug6125 is DS, or closely associated, no doubt all will be revealed fairly soon.

As for the Tunisia Assets, unfortunately I haven't got a presentation.

But MedcoEnergi entered into an agreement with an unknown party to sell its Tunisian assets on 23rd April 2019. The deal does not appear to be completed.

https://africanmanager.com/medco-cede-ses-actifs-en-tunisie/

That same day the EHGOSF guys were appointed to the board of Anglo Tunisian Oil and Gas.

The AAOG RNS of 12th July 2019 says that their appointment to the board of ATOG on 23rd April 2019 was in conjunction with a loan to ATOG to make an initial payment on that date on certain unspecified assets in Tunisia.

Ergo, unless there was an awful lot of deal making over Tunisian assets on 23rd April 2019 these are the two halves of the same transaction.

And this is our potential Tunisian asset

https://ibb.co/yyVqrnp

https://ibb.co/CmpntX1

https://ibb.co/Ph75HtW

Medco picked it up for $114M in 2014. Given the decline in oil prices and production since then we might be able to pick it up for in the region of something like $35M-$40m-ish.

I'm sure all the "delay" has been (and still is) for a purpose greater than simply drilling TLP-103C-ST and producing from the Djeno.

And it will have been very much worth it once the news is out - whenever that may be.

Watch this space - interesting times ahead, I feel.

Yes - looking back I was pretty convinced in September/early October that the funds were selling more than they should have been.

We now know that wasn't correct - they were actually selling around 82% of the average base level - so it would be reasonable to assume the additional shares were Kilkenny.

As for Lukoil/CNOOC - yes they are rivals but Russia and China also co operate.

New Age was crippled by debt owed to Citi Bank until Lukoil bought their 25% of Marine XII for $800M. The value of the 25% was probably nearer $1.2Bn but Lukoil had boxed them into a corner.

https://warsawinstitute.org/lukoil-adds-offshore-congo-project-african-portfolio/

Once Lukoil bought the 25%, the now deleveraged New Age makes a more interesting purchase for CNOOC & Co.

It suits Russia and China to co operate, to give both an advantage over Western rivals.

""In the past six years, we have met nearly 30 times. Russia is the country that I have visited the most times, and President Putin is my best friend and colleague," Mr Xi said.

Mr Putin echoed the praise saying he was "pleased to say that Russian-Chinese relations have reached an unprecedented level. It is a global partnership and strategic cooperation.""

https://www.bbc.co.uk/news/world-europe-48537663

But President Sassou Nguesso would be too smart to give either free reign in Congo, hence frequent trips to Paris and deals with the Western dominated IMF.

New (new, new, that is) shareholder register been published -

http://www.aaog.com/content/investors/shareholder-information.asp

Kilkenny are out, and Sister Holdings SAS have reduced by around 442K.

Maybe Kilkenny were always linked in someways to DS, so no surprises there. DS resigned on 13 September 2019, the shares closing that day at 3.8p. by 15 October 2019 they reached a low of 2.525p, prior to recovering to their present 3.05p. Maybe the pressure of the funds and Kilkenny selling in the month after DS went really hammered the share price?

Sister? Their sale would have netted around £15K at current prices - so maybe just a housekeeping exercise.

It is possible the sales took place some time ago, and maybe it was pointed out that the register published on 2nd November 2019 wasn't strictly accurate. but no RNS from Kilkenny.

https://ibb.co/xmPSv4D

Also, Sarah Cope is now described on the website as Chair. No "interim" - so maybe a hint of permanence there?

A subtle change, just as the deletion of the previous company presentations hint maybe that the previous strategy is not up to date with realities.

As for being surrounded by the Chinese I'm not sure whether that is good or bad in itself. Our geographical location is good, and maybe the Congolese wouldn't want all their eggs in one basket. President Sassou Nguesso is doing deals with Moscow and Beijing, whilst making regular trips to Paris to see President Macron. The master tactician.

I believe we do have some leverage as a result of what we have found and where we are located.

In Q1 2020 we could have 3 outfits all drilling down to the Djeno, AAOG, AOGC and NA/CNOOC, and all the wells located within 7km of Tilapia.

If this isn't an exciting time to be in AAOG, then I don't know what would be.

TT - Yes I'm sure there are many observing Tilapia to see what we do next, and what the results of that are.

In some ways it is a bit frustrating that we are a plc and have to RNS everything, whilst New Age and Wing Wah can get away with being very secretive about what they are up to.

However, as for New Age, they have now completed their seismic on Marine III -

http://www.newafricanglobalenergy.com/congo-brazzaville/

If they've targeted the leads surrounding Tilapia then it is inconceivable that they didn't also conduct seismic over our area also. We might not even know they had been there.

And their website did say they were planning an appraisal well in "Q1 2020", changed after 24 hours to simply "2020". Maybe a bit of a slip up there.

It is also interesting that AOGC appear to be about to drill again at Pointe Indienne after what appears to be many years of inactivity. I wonder what has prompted that? The owner of AOGC is Denis Gokana, who just happens to be friends with Gerard Bourgoin, the owner of Sister holdings SA our 4.12% shareholder and the original owner of Petro Kouliou, which is now AAOG's Congolese subsidiary.

Axelle Bougoin, his daughter, manages the Petro Kouilou office in Pointe Noire.

https://www.bloomberg.com/profile/person/20101185

So lots of wheels within wheels.

Most of the senior managers at New Age appear to have left already, and some have new jobs.

Yu Liang, the proposed new MD, is a CNOOC man through and through, having recently worked for the wholly owned CNOOC subsidiary Nexen Energy.

Congo appears to be in quite a state of flux at the moment with CNOOC and Lukoil coming in and apparently wanting a big slice of the pie. President Sassou Nguesso has visited both each of Beijing and Moscow once within the last year or so. But he has also been to see President Macron in Paris three times within the last 12 months - so it isn't all one way trade.

Maybe JB is just paused, waiting to see how things settle in the Tilapia locality, before making his moves.

That would appear to me to be one sensible option, albeit frustrating for shareholders.

So to keep everyone relaxed - greetings from Bas Kouliou -

www.youtube.com/watch?v=c7FEaHmh3LA

Looks like a done deal awaiting completion -

"8 Oct 2019 - Hopu has already appointed two New Age board members: Gunther Hamm and Sheng Ding Group. New Age employees' continual concern is that all of the company's activities will be transferred to mainland China or Hong Kong, along with the group's long-seated London office"

Once it completes Tilapia will be completely surrounded by Chinese entities. An interesting situation to be in, given our geographical location.

Bit more...it is behind a paywall.

Doesn't appear to have completed yet.

"Hopu Investment Management Co, one of the two main invests in New Age alongside Kerogen Capital (Asia) is expected to take charge of the junior in the coming weeks. According to our sources, Hopu should appoint Chinese national Yu Liang as New Age's new managing director."

I think New Age have sold already.....from Africa Intelligence

"CONGO/CAMEROON : Hopu and Cnooc poised to take over ...

https://www.africaintelligence.com › exploration-production

8 Oct 2019 - As the junior oil firm's senior management in London pack head out, the Chinese takeover is moving into place. Hopu Investment Management Co, one of the two main invests in New Age alongside Kerogen Capital (Asia) is expected to take charge of the junior in the coming weeks..."

And most of the oil and gas from Marine XII, of which Lukoil bought New Age's 25% stake in September goes to China in any event.

It will be interesting to see how the cards fall here, and maybe it is wise to wait until the final picture emerges, bearing in mind both Lukoil and CNOOC may be keen to expand further - JB may be waiting also.